USA Funds Debt Manager Helping Indiana Business College Lower Default Rate

Steve Weeden believes in being proactive when it comes to default-prevention activities.

That’s why the 12 campuses that make up Indiana Business College start contacting delinquent borrowers when they are only 15 days past due on their student loans. Since last fall, the campuses have been using USA Funds Debt Manager^® to send letters to their students.

“USA Funds Debt Manager is an awesome tool,” he says. “It doesn’t miss anyone. It’s made our job much, much easier.”

As loan-repayment manager, Weeden oversees default-prevention activities at all 12 campuses. Overall, the private career school based in Indianapolis has about 4,500 students enrolled in a variety of programs ranging from accounting to culinary arts, and from medical billing to therapeutic massage. About half are nontraditional students, and more than three-fourths of all students use some sort of financial aid.
 
Each month Weeden uses USA Funds Debt Manager to generate campus-specific reports of students who are past due on their student loan payments. He sends the lists to the financial-aid offices at each campus, and staff members are required to remove a certain percentage from the list each month.

“If there are 75 students on the list, we want 30 percent of them off the list by the end of the month,” Weeden says. “USA Funds Debt Manager helps us accomplish this goal by leaps and bounds.”

The school’s 2004 cohort-default rate was 6.4 percent, down from 7.3 percent in 2003. Weeden estimates that the school’s draft 2005 cohort-default rate will be around 4.7 percent. The rate includes every campus but the Muncie, Ind., location, which files separately.

Weeden tracks all contacts that the campus financial-aid administrators make with students. Most of the campuses have only a few hundred students, so the financial-aid-staff members determine how often to contact the students. “Many times these people are their neighbors. They see them at church and at the grocery store,” he says.

Once contact is made, Weeden will check to see if students have made payments and to see if their delinquencies have been removed from the list. He will send deferment or forbearance forms to students and include stamped envelopes for the students to return the forms to Indiana Business College. And then he will personally handle the paperwork for the student.

“We work together as a team,” he says of his role with the campus financial-aid offices. “It’s part of our daily routine.”

For the most part, the students appreciate the help, he says. “We always ask, ‘What can we do to help you?’ We’re not bill collectors; we’re here to help,” he says.

Weeden’s favorite feature of USA Funds Debt Manager is the on-demand report feature that allows him to generate a report in an hour. “I’ve been doing default-prevention work for 15 years, and it used to take me a full week to put together reports. With USA Funds Debt Manager, I have the reports in an hour, and I can e-mail the reports to the campuses.”

He also likes the fact that USA Funds Debt Manager is simple to use. “It’s very user-friendly,” he says. “I’m no computer genius — and if I can use it, anyone can.”